Battery-grade lithium prices were unchanged in Asia, Europe and the United States in the week to Thursday February 27, with market participants continuing to track the spread of the novel coronavirus (2019-nCov) in South Korea and Europe although both regions are yet to see a great impact on prices, sources said.

The novel coronavirus outbreak in South Korea has made market participants wary, but prices are yet to be affected.

“Our suppliers in China resumed production and started to deliver to us, but there is still one or two weeks’ delay from the original schedule,” a Asia-based buyer told Fastmarkets.

Meanwhile, the battery raw material market is wary of the potential effect of the spreading novel coronavirus in South Korea. The national government increased the coronavirus alert to the highest level on February 23 due to the number of cases in the country.

Many market participants spoken to by Fastmarkets are keeping a close eye on whether there will be production halts there in the near term although lithium buyers have reported no great impact on production so far, citing “normal” operations this week.

“South Korea is facing a more serious situation [regarding the coronavirus], but for the moment most companies still run their facilities normally. There is no big impact at this time,” a distributor in the country said.

“We are still monitoring the situation in South Korea, if the situation becomes worse, there will be impact later on the whole supply chain. Our customers in South Korea are unaffected this week,” a producer said.

Chinese market demand stays low
In China, disruptions to the domestic logistics network, which has been weighing on market sentiment since the authorities first clamped down on movement in early February to contain the virus, are starting to ease.

But downstream demand for lithium remains thin in the spot market, with buyers saying they are in no hurry to purchase during a depressed market.

“Downstream buying enthusiasm remains thin so we haven’t adjusted our battery-grade lithium carbonate prices. I think more buying will be seen in March,” a Chinese producer said.

“We haven’t started purchasing lithium this week and only sent inquires to our suppliers to know current prices. Carbonate prices haven’t increased, and I don’t think prices will go higher considering the current sluggish market,” a buyer said.

Battery-grade lithium hydroxide prices held steady this week too with no price contributors reporting any increases. There were limited transaction in the market, sources said.

European prices stable but virus worries linger
Battery-grade lithium carbonate and hydroxide prices in Europe and the US held steady this week amid slower than usual business due to renewed concerns regarding the novel coronavirus outbreak that has spread to a number of European cities and has deterred participants from taking positions in the market.

Market participants hold divergent opinions on how the virus is affecting the lithium’s market. Some believe supply and demand will take an equal hit, balancing the effect on the lithium price.

“[Both] production and demand will be down due to the coronavirus outbreak… they will counteract each other… as a result, I do not see a significant bullish impact on lithium prices [from the coronavirus outbreak],” a producer said.

“At the same time, I don’t see prices falling any further we are reaching the bottom of the curve,” the same producer added.

On the other hand, a European buyer said that the impact of the coronavirus could be either bearish or bullish on lithium’s prices. He added that disruptions on the supply side in China could affect supply in other parts of the world.

“China is not the only consumer of lithium,” the buyer said.

Although China is the biggest lithium producer globally, market participants in Europe and the United States traditionally source their raw material from South America, especially from Chile. This means the disruptions in Asia have had limited impact in Europe and the US so far.